MR. TOM BROKAW: Our issues this Sunday: the race for the White House. Two more debates and 37 days to go as both sides make their case and a deal on the financial bailout does seem near. Obama vs. McCain; the top strategists from each campaign square off after the debate. With us, David Axelrod for the Obama campaign and Steve Schmidt for the McCain campaign.

Then, we kick off the return of our Senate Debate series: the tough fight in Colorado. Republican former Congressman Bob Schaffer against Democratic Congressman Mark Udall.

And in his fourth annual Global Initiative conference, former President Bill Clinton convenes leaders from around the world to discuss poverty, energy, the environment and more. We talk global policy and American politics, Decision 2008, with our guest, the 42nd president of the United States, William Jefferson Clinton.

But first, it was McCain vs. Obama on Friday night in Oxford, Mississippi, and this morning it's Schmidt vs. Axelrod, chief strategists for their respective campaigns.

MR. BROKAW: We're not going to get into this business about who won and lost the debate, because I have a pretty fair idea about what conclusions you would come to. Let's see if we can agree on one thing. The big winner was Ole Miss. They conducted a--and hosted a very successful debate, and then the Rebels went to Florida on Saturday and knocked them off. Now, neither campaign can take credit for the Ole Miss win in Florida at the beginning, if we can at least stipulate that.

MR. AXELROD: We can agree to that. It was a great, it was a great setting, it was a great debate. Glad that it went forward, glad you guys came.

MR. SCHMIDT: They did a tremendous job down there, and Senator McCain was thrilled to have the opportunity to talk to the American people.

MR. BROKAW: All right. Let's begin with the news this morning. It looks like they've got an agreement on a bailout program; the outline of it, at least. We'll have greater details before the end of the day. Is Senator McCain happy with what he's hearing about it?

MR. SCHMIDT: He's happy that there appears to be a framework completed. Earlier in the week, when Senator McCain came back to Washington, there had been no deal reached. All the financial experts in both parties were saying that this could be an economic catastrophe if, by Monday morning, if the markets opened without a deal done. What Senator McCain was able to do was to help bring all of the parties to the table, including the House Republicans, whose votes were needed to pass this. So it appears that great progress has been made. We look forward to--Senator McCain looks forward to reading the fine print of this. But it does appear that great progress has been made overnight.

MR. BROKAW: But has he been making specific suggestions about what needs to be in this bill? When he came back on Friday, the House Republicans said to him, "This won't fly because we want an insurance program, not just a buyout."

MR. SCHMIDT: Does appear that there will be insurance as part of the final package. But importantly, Senator McCain laid out a number of principles, saying, for example, that CEOs cannot benefit from taxpayer dollars, the CEOs of these firms who have ripped off the American people. That there be oversight, that there be accountability. Those principles appear to be contained in legislation. But what Senator McCain was able to do, the reason he suspended his campaign, the reason he came back to Washington was to help get all of the parties to the table. There had been announcements by Senate leaders saying that a deal had been reached earlier in the week. There were no votes for that deal. Senator McCain knew time was short and he came back, he listened and he helped put together the framework of getting everybody to the table, which was necessary to produce a package to avoid a financial catastrophe for this country.

MR. BROKAW: Mr. Axelrod, I think it's fair to say you have a skeptical expression on your face. Your candidate left Mississippi, however, and resumed campaigning. He didn't come back to Washington. Has his role in this been primarily as a man who's been getting information from Democrats on the hill?

MR. AXELROD: Well, I'll tell you what his role has been from the beginning. He's been in touch with Secretary Paulson, Chairman Bernanke, the leaders of Congress, and he is the one who has been urging these principles that Steve has now embraced today. The fact is, when the--when this crisis emerged, Senator McCain's first reaction was to say the economy is fundamentally strong. The next day he suggested a commission to study this and by eight days later he said it was such a crisis that he was going to suspend his campaign. He showed up a day later in Washington. It isn't clear what his role was, so it's a little bit of fiction to now claim credit for it. That's not the important thing, though. The important thing is that the principles that Senator Obama outlined originally are now embraced and taxpayers will be protected.

MR. BROKAW: Let me just share with you what The Wall Street Journal had to say about the opening statements of your two candidates at the debate the other night.

"The debate took place amid the backdrop of the financial crisis, and perhaps most disappointing was how neither man seemed to have anything useful to say about it. ... What neither man showed was any real insight about our financial market issues, or any political courage in offering a solution."

Are you going to have to go back and replate your economic program, Mr. Axelrod, going forward, because of the changed conditions that result--as a result of this bailout program?

MR. AXELROD: Well, first of all, I don't accept the premise of the Journal piece. The fact is that Senator Obama's been warning for a year and a half about this crisis--about the possibility of such a crisis because of the lack of oversight and greed on Wall Street, and he's been talking to the players from the beginning to kind of--to try and find a solution that works for taxpayers. In terms of any--the new president is going to have to deal with the realities of our situation and this is going to add to the problems that the policies of the Bush administration, supported by Senator McCain, have created huge deficits, unemployment at a five-year high, wages declining, home values declining. We have a lot of problems in this country. It's going to put pressure on the budget and we're going to have to make some hard decisions. But the decisions we make are to prioritize, and this is what Senator Obama said that night, are to prioritize the middle class. What was phenomenal about that debate was that in 40 minutes on the economy, Senator McCain never once mentioned the middle class, never talked about the struggles people are going through. We need to create an economic recovery plan that puts at its core the middle class in this country.

MR. SCHMIDT: Well, Tom, you know, this was a debate about national security, about foreign policy. You never heard the word victory from Senator Obama when it came to wars this country's fighting. But we did talk about the middle class. We talked about the fact that Senator McCain proposes raising the child care--the child exemption from $3500 to $7,000, about giving a $4,000 tax credit to the American people for healthcare. One of the things in this race is the difference between what Senator Obama says--he is a great talker--but what his record is. He has, over the course of this campaign, called for taxing people's investments by raising capital gains taxes. He's talked about raising taxes on natural gas and on coal. He has talked about raising the top rates on income taxes. He has talked about taxing Social Security benefits.

Now we're 38 days from the election. Senator Obama now on a lot of these issues has changed his positions. He's laid out a different--a number of different tax plans during the course of the debate. But fundamentally, what Senator Obama's record is different from what he says out on the campaign trail. Ninety-four times, Tom, 94 times, when he had an opportunity to vote against higher taxes or to vote to lower taxes, he took a pass, including voting to increase taxes through a budget resolution that he said were his priorities on people making as little as $42,000 a year. It's a recipe for disaster for the economy of this country.

MR. AXELROD: Now let's have a reality check, because this is the--these are the miss--miscast lies, essentially, about taxes that we've heard from this campaign over the course of many, many months, and it's been--they've been rebutted again and again by independent sources who say that the Obama plan provides three times as much tax relief for the middle class as the McCain plan. The McCain plan is essentially $300 billion in new tax breaks, $200 billion for big corporations, $100 billion for the very wealthy, and 100 million Americans are left out. It's more of the same.

MR. BROKAW: But the picture economically is darker with every passing day, and here's what Robert Bixby, who is with the Concord Coalition, had to say about your two candidates. "I don't think either candidate is treating the deficit, or the debt, seriously. I don't see any proposals from either one that would make the situation any better." This is a nonpartisan observer who is looking at it. Senator Obama the other night was asked to name one program that he would cut given the economic realities. We're going to be at war in two countries, he wants to reform healthcare, have alternative energy and early childhood. He didn't name one program, Mr. Axelrod.

MR. AXELROD: That's not true, Tom. He talked about the Medicare Advantage program, which is a big giveaway to the insurance companies within the Medicare program. That's $15 billion a year right there. Another big item that we have to deal with is the $10 billion a month we're spending in Iraq while Iraq has a $79 billion surplus. Senator McCain would like to continue there indefinitely. The American people want to come home from Iraq, to send some troops from Afghanistan, and to begin investing that money here at home. So there are many things that we can do. Obviously, we're going to have to look at the budget, and Senator Obama said he's going to go through it line by line, and he's going to get rid of things that don't work. We have, for example, a one--a reading program that was installed by the Bush administration that turned out to be a big boondoggle. It's not helping any kids learn. We ought to say that doesn't work, let's get rid of it. And that's the approach he's going to take. If we're going to do the things we need to do, the things you mentioned, the things that are going to strengthen the middle class in our economy, we're going to have to be very, very flinty-eyed about what we can keep and what we don't.

MR. BROKAW: Mr. Schmidt, this is The Economist, and this is the issue right...

MR. BROKAW: ...before the Republican convention, and it says, "Bring back the real McCain." They say "Hawkish foreign policy, irresponsible tax cuts, more talk about religion and abortion: all those sounds too much like Bush Three, the label the Democrats are trying to hang around the Republican's neck. We preferred McCain One." Aren't you going to have to go back to McCain One given the reality of this economy?

MR. SCHMIDT: There's only one John McCain. It's the authentic leader that you've seen on display this week, putting his country first, going into the heat to try to solve a huge problem for this country. We reject the premise of it. I would like to respond to something that David said. It's important. Barack Obama, in the United States Senate, in a budget resolution vote that he said was his priorities, voted to increase taxes on people making as little as $42,000 a year. That's the record. That's the truth. What the Obama campaign does any time the record is criticized is they respond by saying that's a lie. It's dishonest politics. Fundamentally, we have a choice in this race between somebody who has a record of voting to cut spending, as someone who has been a protector of the taxpayer vs. Mr. Axelrod's candidate, Senator Obama, who on every occasion throughout his career, has been a vote for higher taxes, for more taxes, for injurious taxes on the American people. That's the record. Now, 38 days before...

MR. AXELROD: That is not the record. Here's, here's what the--here's what the--here's what the record is, David.

MR. SCHMIDT: ...38 days--let me finish, David--38 days before an election, he's trying to portray himself as a tax-cutting Ronald Reagan. Totally disconnected from reality. And with regard to Iraq, I would like to say this. What Senator McCain has said is our troops will come home, but they will come home in victory. We must finish the war we are on the edge of winning in that country because of the strategy that John McCain proposed and the strategy that Barack Obama opposed. Had Barack Obama had his way, this country would have lost the first...

MR. AXELROD: Tom.

MR. SCHMIDT: ...war of the 21st century...

MR. AXELROD: Tom.

MR. SCHMIDT: ...to al-Qaeda and to Islamic extremists with devastating consequences for the security of this country and the world.

MR. AXELROD: Al-Qaeda, al-Qaeda, Steve, al-Qaeda, as was discussed in the debate, the central front in the war on terror is Afghanistan and Pakistan.

MR. SCHMIDT: Not according to General Petraeus.

MR. AXELROD: Osama bin Laden is resurgent today because of the dreadful mistake that was made by Bush and McCain in taking this war to Iraq. But let's talk about taxes. The fact of the matter is that Senator Obama has been--he wrote the earned income tax credit in Illinois, cutting taxes for working families. They just have a difference in philosophy. Steve and Senator McCain believe, as George Bush does, that if we give lavish tax breaks to people at the top, it will trickle down and the economy will grow, and that's what he's proposing now, $300 billion in new tax breaks for corporations and the wealthy, and no way, really, to pay for it. It's the same philosophy with government. And the thing that we saw in that debate is that what Senator McCain was doing was essentially defending the same policies we've seen for the last eight years.

Now, I will say this about the old John McCain. The old John McCain said that to cut, to cut taxes in the middle of a war was irresponsible. The old John McCain said, originally, that the Bush tax cuts offended him because they were too skewed to the wealthy. He then embraced them and made a Faustian bargain with the Bush faction and the, and the right wing of his own party in order to be the nominee of his party. And we've seen that on issue after issue. And now what he's offering is essentially a third Bush term, more of the same policies. They haven't worked. People want a change. They're not going to get that change from John McCain.

MR. BROKAW: All right. We--I'm going to end on two notes here if I can, very quickly. We have a crowded agenda this morning. Let's go back to this business about winning in Iraq, if we can. In fact, a number of people on the Republican have--side have said that we're winning. But in an interview with the BBC, General David Petraeus said he did not know that he would ever use the word victory about Iraq. "This is not the sort of struggle where you take a hill, plant a flag and go home to a victory parade. ... it's not" a "war with a simple slogan." So isn't it misleading in many ways for Senator McCain to say we are winning and we'll come home when we have declared victory?

MR. SCHMIDT: Well, absolutely not. Here is what victory means in Iraq. It means an Iraqi government that is able to protect its borders, and it means an Iraqi government that is able to protect its people, then moves forward on its path to democracy. This country was losing this war. Senator McCain stood up to the Bush administration, called for the firing of Don Rumsfeld, risked his political career to advocate a strategy almost by himself that has led us to the edge of victory there. Senator Obama opposed that strategy. In the debate you heard not one time from Senator Obama the words victory. We must win this war. This country doesn't have a choice. Senator Obama's judgment on issues of security to this country, whether it's on Iraq or calling Iran a tiny threat or saying that...

MR. AXELROD: Tom.

MR. SCHMIDT: ...he would sit down unconditionally with the Iranian president without preconditions make the world more dangerous. It is...

MR. AXELROD: It is, it is, it is...

MR. SCHMIDT: ...a fundamental consideration for the American people.

MR. AXELROD: ...ludicrous, it is ludicrous to assert after four years of mistake after mistake after mistake, when he didn't challenge Mr. Rumsfeld, when he didn't challenge the Bush policy, when he cheerleaded for it to then say that he was a critic of the policy.

MR. SCHMIDT: Just not true that he didn't challenge Secretary Rumsfeld.

MR. AXELROD: Just a, just a, just a second. Just a second, Steve. I let you speak.

MR. AXELROD: What has happened is, as Senator Obama predicted from the beginning, that we got distracted in Iraq and now Osama bin Laden, who was the person who attacked the United States, killed 3,000 American citizens, is now resurgent. He is stronger. And that's the result of the misbegotten decision of John McCain. And he stubbornly wants to continue, even as the Iraqis won't take responsibility, sitting on $79 billion of their own surplus while we spend $10 billion a month. It doesn't make sense. We can't take more of the same, Steve.

MR. BROKAW: In fairness to everybody here, I'm just going to end on one note, and that is that we continue to poll on who's best equipped to be commander in chief, and John McCain continues to lead in that category despite the criticism from Barack Obama by a factor of 53 to 42 percent in our latest NBC News/Wall Street Journal poll.

Gentlemen, thank you very much. I wish we could spend the rest...

MR. AXELROD: Thank you, Tom.

MR. BROKAW: ...of the day talking about these issues. But you're invited back, and I hope you'll make your second...

Coming up next, we kick off our 2008 Senate Debate series with the battleground state of Colorado. Former Congressman Bob Schaffer vs. Congressman Mark Udall. Also, former President Bill Clinton on Decision 2008 and his Clinton Global Initiative. It's only here on MEET THE PRESS.

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MR. BROKAW: A live debate on the Colorado Senate race plus former president Bill Clinton after this brief station break.

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MR. BROKAW: We're back and with us to kick off our 2008 Senate Debate series, the candidates from one of the most closely watched Senate races this year. It's the battleground state of Colorado and the issues are commanding all of our attention. Former Congressman Bob Schaffer on your left there and Congressman Mark Udall.

Gentlemen, welcome. Let's go right to it. First of all, let me begin with you, I'm going to call you Congressman, even though you're out of office now.

FMR. REP. BOB SCHAFFER (R-CO): OK.

MR. BROKAW: Because that's the appropriate protocol. You said you didn't like anything about this bailout bill that was proposed last week. You described it as the dead hand of government making things worse. Based on what you're hearing so far, do you like the general outlines of the program that we'll probably hear about later today?

REP. SCHAFFER: Well, that's the operative approach to the issue is that the details will come out later today, apparently. There's nothing to like about the notion that there is a $700 billion fix needed with respect to a collapse on Wall Street. Seven hundred billion dollars being raised by a government that does not have it essentially means the Federal Reserve has to turn on the printing press in order to create the money. That's about $10 to $11,000 per American household. It's essentially a tax. So you're correct. There--and what I said prior, previously, that you referenced stands. There is nothing to like about the bailout. It is necessary, I think, however, for the Congress to move forward in a way that reacts to the problems that Congress helped create and, in fact, led the way to creating, but to suggest that there's something to celebrate is exactly wrong.

MR. BROKAW: Congressman, Chris Cox, who is the chairman of the SEC, said it's not the dead hand of government.

MR. BROKAW: In effect, he said it's the blind eye of government and he now apologizes for regulations as they were deregulated not working, he said that we went voluntarily and Wall Street just didn't respond to that. That put us in the jam that we're in now and all of that grew out of a Republican culture beginning with Ronald Reagan.

REP. SCHAFFER: Yeah.

MR. BROKAW: So isn't it time to reinstitute closer regulation of Wall Street and these financial institutions, especially in an era of warp speed and electronic trading, which is very hard to keep track of?

REP. SCHAFFER: In some, in some areas, perhaps, with respect to transparency, with respect to certain areas of accountability, of course. But not in a way that slows or constrains the ability of the, the economy to grow. You know, the--you can trace back, however, the--to 2005, with the legislation that was considered in 2005 and again in 2007 with respect to Fannie Mae and Freddie Mac, where there were attempts, actually led by Republicans in the Congress, to put more controls and to put more restraints on Fannie Mae and Freddie Mac. Unfortunately, the vast majority of--including Congressman Udall--opposed those restrictions and those accountability provisions, and that probably more than anything else led to the immediate excesses that you began to see over the last three years.

MR. BROKAW: Congressman Udall, we've been checking the statistics in the Denver area. I'm quite familiar with it. In the second quarter of 2008, one in every 95 households in the Denver area were in foreclosure. The United States average was one in 171. Colorado ranked fifth in the nation statewide. A lot of that was a result of speculation for profit, people going in and hoping to make a quick buck and turn it around. Why should other taxpayers across the country have to now bail out those Colorado mortgage buyers who just did the irresponsible thing?

REP. MARK UDALL (D-CO): Tom, people are mad. People are upset. My calls are mixed between people who say no and people who say hell, no. This is a real crisis that we face. I would tell you that I think there's some principles that we have to pursue as we move towards a rescue plan not for Wall Street, this shouldn't be welfare for CEOs, but for Main Street. And that has to include no blank check, oversight, no golden parachutes. The taxpayers have to be at the front of the line. There has to be a return on their investment, if you will.

I want to correct the record. Congressman Schaffer just suggested that in 2005 I didn't support reform efforts for the GSCs, Freddie and Fannie. I did, in fact. I worked with Republicans to make those changes at that time. So I've been on the leading edge of saying that this is a real problem. I would tell you what we can't do, though, and that's return to the policies that Congressman Schaffer supported and supports today, which are tax breaks for CEOs, tax breaks for companies that offshore jobs, tax breaks for the wealthiest among us, like the oil companies and other large corporate interests.

REP. SCHAFFER: That's not true, Mark.

REP. UDALL: That's not going to get us to health in our financial system. The lack of regulation--Congressman Schaffer's right, we do need more regulation. But he supported a lessening of that regulation...

REP. UDALL: And I, I think that's where we need to travel. Those are the kind of policies we need to put in place...

REP. SCHAFFER: The--you--what--you, you, you want...

REP. UDALL: ...and hopefully this legislation will meet that standard.

REP. SCHAFFER: Mark, Mark, you, you voted against several amendments. You voted against the Leach amendment, which, which would have--and this is in 2005, on this reform bill that you referenced, that would have established minimum capital levels for Fannie Mae and Freddie Mac. You voted no. That--and you were in the minority. You voted against requiring Fannie and Mae--Fannie and Freddie to sell--acquire--or acquire assets or liabilities if an asset or liability is deemed to be potentially system--a potential systemic risk to the housing market. You voted no on that. You voted no on an amendment that would have eliminated the ability of Fannie or Freddie Mae--Fannie Mae or Freddie Mac to borrow from the U.S. Treasury.

REP. UDALL: ...is we're where we are because--the point is, Bob, we're where we are because of policies of Congress in the '90s, in the early part of this decade.

REP. SCHAFFER: Mark, Mark, Under Secretary Robert Steel said--he issued a statement on your, your vote that, that the House had, "significantly weakened a new regulator for the firms." He said, "As a result of these amendments adopted on the floor, the department does not believe this bill adequately guards our financial system with the necessary oversight." You voted for that, Mark, and that is, that is something you're responsible for. And along with the rest of the Democrats in Congress who were in charge in 2007. And that leads directly to the crisis we're seeing on Wall Street today...

REP. SCHAFFER: ...that is going to cost every Colorado family at least $10 to $11,000 per household as a function of a $700 billion bailout with money that does not exist that you guys need to go print.

REP. UDALL: I'll let you finish. This is the result of years and years of Republican leadership, or lack thereof, in Washington; tax cuts for those who don't need it, tax cuts for the oil companies...

REP. SCHAFFER: Mark, I've been out of Congress for six years. You're...

REP. SCHAFFER: It is a, it is a national tragedy, and there is nothing to like about it.

REP. UDALL: Let me finish. Let, let me finish.

MR. BROKAW: But Congressman, it has been your party, in all fairness, that has been in charge for the most part of the last eight years, and it has run up record deficits of now $500 billion. The fact of the matter is that the economy in the next year probably won't grow very much at all. The man who's at the head of your ticket, John McCain, says that he can balance the budget with spending cuts alone. He talks about earmarks that represent only about $18 billion.

REP. SCHAFFER: Right.

MR. BROKAW: Based on your own experience during this campaign, aren't the American people looking for more candor than that? Is that a promise that he can fulfill, in your judgment?

REP. SCHAFFER: They're looking for candor, and I'm--and Senator McCain's certainly providing, providing. You're correct that under Republican leadership, deficits grew, and I think it has to--mainly do as a function of war. However, I was in Congress for six years. I was there from--I got elected 1996, I left in 2002. During those years, we did balance the budget. In fact, we did it four years ahead of schedule, and we did it by trimming the rate of growth in spending and specific cuts, but more than anything else, the tax cuts, which applied to middle class households and families that we helped pushed forward--Mark Udall likes to talk about it as tax cuts for the rich--for all of the homeowners at home who are middle class people, congratulations, you're rich under that definition--but we actually grew the economy faster than had been projected, we grew--we actually increased the amount of revenue coming to the federal government while we were slowing down the rate of growth in spending and reforming on a, on the regulatory side, welfare reform, for example, other reforms within the Congress that helped unleash the productivity of the economy. We did balance the budget four years ahead of schedule, and that allowed us to start talking about surpluses to help add years to the solvency of Social Security and Medicare. So I was there during the times when we actually delivered on what we promised...

REP. SCHAFFER: Well, good. Well, listen. I'm not running--I'm not running--I'm not going to carry the water for every bad decision Republicans and Democrats have made. Look, there's lots of people in Washington who can't make a prudent decision or make a tough call on what's really a priority for the country. But when I was there, I did. I've been back in the private sector paying these taxes and generating revenue for the country and helping to create jobs, and when I come back to Washington, I'll take all that experience with me and do it in a way that Mark, you never did in the 10 years you've been there.

REP. UDALL: That's a great narrative, but go back to 2002. You cast votes for a war. You cast votes for tax cuts for the wealthy. You cast votes against...

REP. SCHAFFER: You proposed votes against the declaration of war, Mark.

REP. UDALL: You need to be accurate. You cast votes against an energy policy set of proposals that would have us much closer to being energy independent today.

REP. SCHAFFER: I cast votes in favor of an energy policy.

REP. UDALL: Let me finish. For you to sit here and suggest that somehow you're immune from any of the criticism or any of the blame for the straits we find ourselves in is laughable. The policies of the Bush...

REP. SCHAFFER: ...I proposed back home that we debate all of these topics...

REP. UDALL: We have been debating these topics all over the state of Colorado.

REP. SCHAFFER: ...in an open format, you rejected, you rejected the opportunity to debate these issues.

REP. UDALL: We're having a debate today. We...

REP. SCHAFFER: Yeah.

REP. UDALL: This is our ninth debate, Bob. We're going to...

REP. SCHAFFER: And it's not going particularly well for you, because you can't rely on facts...

REP. UDALL: ...we're going to have eight more debates.

REP. SCHAFFER: ...in order to support your conclusion.

REP. UDALL: Well, I can rely on fact.

MR. BROKAW: Congressman Udall, let me, let me see if I can move it along in some other areas. Let me begin. A lot of this has to do with symbolism, obviously. You think that the Democrats should remove Charles Rangel as the chairman of the House Ways and Means Committee. He is the powerful chairman of the tax policy committee, and it turns out that he's living in rent-stablilized apartments in New York, he didn't pay taxes on a condominium that he owns in the Dominican Republican that he got with a favorable loan. Wouldn't it be a good idea for the Democrats to step up, however popular and powerful he is, and said, "Mr. Rangel, you should step aside for awhile while we're going through this economic crisis. Everybody has to pay a penalty"?

REP. UDALL: Chairman Rangel has served the country admirably and heroically. He was honored and received medals in the Korean War, Tom. The ethics process is unfolding. Congressman Rangel's called three different times for that to occur. He's been forthcoming. I think it's his decision whether he steps down or not as the chairman of the Ways and Means Committee.

MR. BROKAW: Would you prefer for him to step down?

REP. UDALL: I think it would be helpful if Charles Rangel stepped down, but he's served the country well. We need his expertise, and I know whatever happens, Tom, he will do right by the country.

MR. BROKAW: Let me ask you something, if I can, Congressman Schaffer. You said recently that the federal government is raking in a bunch of money right now on the backs of energy companies. What did you mean by that?

REP. SCHAFFER: Well, first of all, Charles Rangel admitted that he didn't pay federal taxes. If he's the tax...

MR. BROKAW: No, I know, I know. Listen...

REP. SCHAFFER: Listen, if you're a member of the House and the head of your tax writing committee admits he doesn't pay taxes, you ought to have the courage to stand up and say he needs to go. But secondly, with respect to--it's absolutely, it's absolutely correct that the dramatic increase in revenue for the federal government right now is a function, partially a function, of the dramatic increase in energy prices. Those prices result in the marginal tax rate on--or marginal profit rate on the energy industry generally is about 8 percent right now, so as the price climbs, that 8 percent then creates an extraordinary amount of profit. That profit is taxed, and so you're correct. I can't remember the statistics offhand, but the windfall to the federal government as a result of high energy prices is what the government is raking in right now and not spending it particularly well.

REP. UDALL: (Unintelligible)

MR. BROKAW: But when you use the phrase "on the backs of the energy companies," you sound like they're poor, beleaguered companies that the federal government is taking advantage of.

REP. SCHAFFER: Oh, absolutely not. No, they're not taking advantage of them at all. Eight percent--an 8 percent marginal profit is not too bad in the American context today. There are other industries that make more, insurance industry is making more, some in healthcare are making more of a marginal profit. Eight percent is somewhere in the middle of the economic performance of industry sectors. But 8 percent on top of $1, you know, up to $1.20 per gallon, what is it today, about $1--or $107 per barrel, is--represents extraordinary profits and so the federal government is raking in funds as a result of this energy crisis, which leads me to the conclusion that you look for reasons why people in Washington, like Mark, have fought to drive energy prices up. That's one of the possible motivations.

REP. UDALL: That's laughable. Congressman Schaffer's an oil and gas executive. Of course he's going to take the side of the oil and gas industry. Forty billion dollars in profits in one quarter, I think to most Americans is pretty excessive and pretty handsome. If you want, Tom, maintenance of the existing energy policy we have in this country, which is focused on oil and gas development of fossil fuels, which we do need, then you ought to hire Congressman Schaffer.

REP. SCHAFFER: That's not true.

REP. UDALL: If you want a comprehensive...

REP. SCHAFFER: I'll change it dramatically.

REP. UDALL: If you want a comprehensive plan, if you want to throw the kitchen sink at this where we take a fresh look at nuclear and we develop clean coal supplies and we invest deeply in renewables and in conservation, we also drill responsibly, I'm going to be the senator that's going to pursue that. I've been working on this my entire career in the Congress. Congressman Schaffer's an oil and gas exec, that's all he knows, that's what he's going to promote.

MR. BROKAW: Let me see if we can get to Iraq, very quickly. Congressman Schaffer, you have said a definition of success is that if Iraq on its own has security, a police department that functions, and a political and an economy that is stable, you said, "It's not going to be in the next two or three years, most likely." Do you think that the American troops will be there five years from now in Iraq?

REP. SCHAFFER: Hard to say. I hope that. Or if they are, I hope that some, at some level that it's not, not involved in tactical strategy on a day-to-day basis--or not on tactical involvement on a day-to-day basis, but strategic. But I'd hoped that we'd have American troops out even sooner. That statement you read, I think is maybe even over a year old already and it was before there was a clear indication that the surge has worked. I am optimistic, however, that we are achieving those objectives right now. I'm already talking about troop deployments, already discussing even moving up the deployments in January of possibly three brigades and moving--withdrawing three brigades. That would allow us to redeploy them in places like Afghanistan and elsewhere where they're needed or bring them home and just save money.

MR. BROKAW: A year ago you said that the surge was a tragic mistake. Were you wrong?

REP. UDALL: The surge has helped. There are other factors in Iraq that have been helpful. The Al Anbar Awakening, Muqtada al-Sadr's call for a cease-fire. There's ethnic cleansing to a great extent now that you don't hear that story. Sunni and Shia do not live together anymore in places like Baghdad. But whatever the situation was then, Tom, it's now time to leave Iraq in an honorable and responsible way. As a member of the Armed Services Committee, I know how stretched our military is. I also know we haven't finished the job in Afghanistan and in Pakistan. Bin Laden is still at large. I also know we have no capacity to defend our own country or to respond to any other emergencies all over the world. It's time to turn Iraq back over to the Iraqis and refocus on a tough and a smart national security policy.

MR. BROKAW: Very quickly, Colorado's a battleground state. Give me the numbers on November 4, who finishes first and by how much in the presidential race? First, Mr. Udall, quickly.

REP. UDALL: I think it's Obama 50, 47.

REP. SCHAFFER: It's going to be 51 McCain and Obama, who believes that the surge has worked, is going to around 40, 48 or 49.

MR. BROKAW: Thank you very much.

REP. UDALL: The country's ready for change, Tom.

MR. BROKAW: Congressman Bob Schaffer, Congressman Mark Udall. Thanks very much for being with us.

REP. UDALL: Thank you.

MR. BROKAW: We'll be keeping track of this campaign, and of course, we'll be reporting the results on Election Night. Thanks for being with us here on MEET THE PRESS. The first of our series on Senate Debates.

Coming up next, former President Bill Clinton talks politics and policy and shares his thoughts on John McCain and Barack Obama as individuals and as candidates. That's next, only on MEET THE PRESS.

MR. BROKAW: We're back here on MEET THE PRESS, and on Thursday this past week I sat down for a wide-ranging interview with former President Bill Clinton at his annual Clinton Global Initiative gathering in New York, and I began by asking him about any concerns he may have about private philanthropy drying up in this financial crisis.

FMR. PRES. BILL CLINTON: Well, right now it isn't drying up. I think right now a lot of the kind of the people who do this work are inherently optimistic and deeply committed, and they see this, our Global Initiative and their commitment to the world and in America as a way of building confidence again.

MR. BROKAW: You think that this financial crisis will be, in a way, a game changer for the American political culture.

PRES. CLINTON: I, I think it could be a game changer in a number of ways. First, it could change the political culture. I think that's important. I think it's important that you have the Republicans and Democrats in Congress asking the same good questions, good questions about if we're going to put up $700 billion, how will it be spent? To help homeowners, to give the taxpayers a chance to get their money back, to be transparent? I think that's important.

I also believe it will have beneficial long-term economic consequences. That is, you've got Goldman Sachs and Morgan Stanley going into the bank holding company act, which means that they'll still be able to issue stock, they'll still be able to have some speculation, as there always is, but there, there--you are not going to have these crazy binges of sub-subprime mortgages or the derivatives, because people now recognize all over again what they had to learn in the depression and two or three times since, which is markets, if unaccountable at the margins, will self-destruct. They will cannibalize themselves. So I think we've learned that. Listen, this--if we can just get out of this thing now and get the show back on the road, we will have learned quite a lot that's good for us.

MR. BROKAW: You know, we like to keep track of records here on MEET THE PRESS, as you're well aware of. We looked at this interview that Tim did with you a year ago at the Clinton Initiative--Global Initiative, and at that time you predicted that John McCain would be the Republican nominee, at a time when a lot of people thought he was...

PRES. CLINTON: He was dead.

MR. BROKAW: ...toast, in political terms. But you said as well, at that time, "I've disagreed with him, but I have admired him." And then to Maria Bartiromo last week you said, "I have never concealed my admiration and affection for Senator McCain. I think he's a great man. But I think on the issues, that matter to our future, the Obama-Biden team is more right."

PRES. CLINTON: I do believe that. I think Senator Obama has shown a remarkable ability to learn and grow in this campaign. He always was highly intelligent and always a very good politician. He, he got the change--the fundamental change in, in the calendar of this Democratic primary process of which we were engaged, his energy program kept getting better through the campaign, his healthcare program kept getting better. I, I, I think what you want in a president at a time like this is somebody with good instincts who generally starts in a right position and then just keeps getting better and that's what he's done.

MR. BROKAW: Would you use the same words for him that you have used for Senator McCain, that you admire him and that you think he's a good...

PRES. CLINTON: Well, I don't, look, I had my first conversation with him in my entire life in Harlem.

MR. BROKAW: You had never talked to him before that meeting.

PRES. CLINTON: No, I'd talked to him, but always in passing. I did a fundraiser for him when he ran for the Senate in 2004. I saw him briefly at Senator Kennedy's 75th birthday party. I had always, you know, I always--Hillary's the one who told me to go help him. She said, "This guy's got real skills. He's got almost unlimited potential." And I--she--so I did and I've always thought he was a really commanding presence. What I mean by saying that about McCain is, you know, most people would've been broken by what he went through. Oh, we would've been happy just to give him an "atta boy" and a medal and let him wander through life. I, I think his greatness is that he keeps trying to come back to service without ever asking people to cut him any slack or feel sorry for him or any of that stuff because he was a POW. But I, I genuinely, you know, I am developing a really good relationship with Senator Obama and I certainly admire him. And I know he saw and imagined the way this thing could develop, this political year and this, and this economic situation in a way that is left him in a position of leadership that he's in now. And I think that the rest of us should admire that. That's a big part of leadership, being able to sense, as well as see the future.

MR. BROKAW: But I get the sense that you think that he has the potential for greatness, but he's not yet arrived at that station.

PRES. CLINTON: Well, he would probably agree with that. I mean, he was, you know, until he was in the State Senate until 2005 and then he began a campaign for president, which is, in all probability, will be successful, and those are very great accomplishments. But those are personal accomplishments. When he becomes president, he'll be doing things for the American people and for the world and he is--and the greatness will then become apparent because of the good he'll do. And I, I think that's what I very much believe is going to happen.

MR. BROKAW: Mr. President, after the primary season came to an end, you went back to Africa to work on your foundation work there and you were interviewed by Anne Kornblut from The Washington Post. You said, "This is my life now, and I was eager to get back to it. I couldn't be happier." Then you did come back, obviously, and you spoke at the convention. You were extremely well received there. You had the meeting with Senator Obama in Harlem. No one has any keener sense of what is required in a political campaign than you do. How much time are you going to spend either at Senator Obama's side or working on his behalf between now and Election Day?

PRES. CLINTON: I'm going to do my very best to do every single thing he asks me to do. I mean, I...

MR. BROKAW: Where do you think you can help him the most?

PRES. CLINTON: I ask--let me back up and answer your question because what I told Anne Kornblut is right. I had to go back to work when this was--after Hillary concluded her campaign, I had to go back and rev this foundation up again, made my Africa trip work, make sure that this works and I love this work. But I also accept that by engaging in this primary process, Hillary and I both feel that we did--we told--first of all, she told everybody that if she didn't win, she told everybody from the very first primary in Iowa that if she didn't win, she would support the winner. Then when it was obviously between her and Senator Obama, she said, "Absolutely, I'll support him." And she has been as good as her word. I don't think anybody in 40 years who's been in a race like this has ever done as much for the nominee. And I said I would do the same. And I was asked repeatedly. So I'm keeping my word, but I also feel strongly for the reasons I said in Denver that he should be elected. So I'm going to do whatever I'm asked to do.

MR. BROKAW: Do you think that Sarah Palin, the governor of Alaska, who's the running mate now for John McCain, will peel away the disaffected Hillary women voters who are not happy that she didn't get the nomination?

PRES. CLINTON: Maybe some. I read two different articles about women who said what African-Americans often said about Senator Obama. They said, these women said, "Look, we think gender's more important than race or party or even issues. It is the defining characteristic of the social order and we believe that it's important to do this." But I don't think they'll be many people who do that. I think the differences between Senator Obama and Senator McCain and between the ticket of Obama-Biden and McCain-Palin are significant enough that the overwhelming majority of people who supported Hillary in the primary or who didn't vote in either primary and are going to vote, I believe they'll break for Senator Obama.

PRES. CLINTON: I would--I would make the case for--why he and Barack Obama should lead a different direction for America, and I will be quite specific, because my sense--and you know who these undecided voters are. You've seen the polls. Most of these people that are undecided, they like John McCain, and they kind of like her, what they know of her. And if they're going to move off of her or dislike her, it's going to be because they think she is too conservative or too traditionally Republican on some issues that are very important to our future. So if I were Joe Biden, I would demonstrate to the American people that first, "Barack Obama picked me because there's not a better foreign policy mind in the United States Congress, anybody with more experience or better judgment."

Second, that "He picked me because I'm from the folks who didn't vote for him in the primary. I'm from northeast Pennsylvania, from a Catholic working family, and I go home to Delaware every night to be with my wife, and my kids are great." That is, I don't think he has to whack her, or should. Everybody that really is upset about Sarah Palin because she's too conservative or too Alaska or too this, that or the other thing, they're already for the Obama-Biden ticket. We've got to get people from your native state, in South Dakota, and people in Arkansas, and they look at this woman, and they say, "You know, this is a pretty impressive deal."

MR. BROKAW: When you ran successfully for president in 1992, the unofficial slogan was, "It's the economy, stupid." It's hard to imagine, given the political and especially the financial climate that we're all living in now that someone can say it's about aid to Africa, stupid, or it's about AIDS, stupid, or it's about doing something about poverty, stupid. Is this not going to be an issue, your great work here as the Clinton Global Initiative, in this campaign? Is it going to have to be set off to the side?

PRES. CLINTON: Well, I think the answer is it will not--it's not nearly as big an issue for the two thirds of American people who are having trouble paying their own bills and are worried about their future. On the other hand, I think there--the two great issues in America in this election are how to restore economic strength and broadly shared prosperity and how to restore America's position in the world. I think--if I were making the CGI argument in a political speech, I'd say we're not going to have the America we want unless prosperity is broadly shared, and to do that, we have to have economic opportunity in the poorest parts of America. And in the world, the places where America is popular today in the world, really popular, 10 countries in central and eastern Africa. Look at the Pew poll. Wildly popular. Why? Because they see us through the prism of President Bush's AIDS and malaria programs and the work the Gates Foundation does, the work that I do, the work that others do. So we can--this should be presented to the American people that as a part of our participation in the interdependent world, we actually make more partners and fewer enemies.

MR. BROKAW: One of the concerns that the Gates Foundation has, that everything coming out of Africa that is reported is doom and gloom, and they say there are real success stories there.

PRES. CLINTON: Absolutely.

MR. BROKAW: And the American people need to hear about that.

PRES. CLINTON: The American--first of all, I wish we could have a cessation in the use of the word Africa for just 18 months while America learns that Africa is a continent that just in sub-Saharan Africa has 48 separate countries, and that it's not just the geography, it's the politics, the culture, the language, everything is different, and that yes, there's been bad news in Darfur, yes, there's been bad news out of Zimbabwe, but you have country after country after country with very high growth rates and remarkable progress. I mean, Rwanda, genocide in '94, 10 percent of the country dies in 90 days. Four years later, their per capita income still well under $300 a year, 10 years later, $1,000 a year. Nearly quadrupled their per capita income. That's the real Africa. That is far more representative of what the African people are doing and can do tomorrow than the other, and I really wish every time we talked about it--you should discuss it with your news people--whether we would mention a country. You might say, "Oh, by the way, it's in Africa," but we've got to stop thinking of Africa as a monolith.

MR. BROKAW: On October 7, I'll be hosting the first town hall presidential debate in Nashville, and you can participate in the debate as well by submitting possible questions for the candidates online, now through Tuesday. You can find a link to mydebates.org at our Web site, mtp.msnbc.com.